FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 18: The Federal Gift and Estate Taxes

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Election to split gifts

A) In the current year, Debby, a widow, dies. Two years ago she inherited a large amount of wealth from her brother.
B) Death does not defeat an owner's interest in property.
C) Exists only if husband and wife are involved.
D) A type of state tax on transfers by death.
E) Must decrease the amount of the gross estate.
F) Annual exclusion not allowed.
G) Cumulative in effect.
H) Right of survivorship present as to type of ownership.
I) Overrides the terminable interest rule of the marital deduction.
J) Exemption equivalent.
K) Bypass amount.
L) No correct match provided.

M) C) and L)
N) D) and K)

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Which, if any, of the following is a characteristic of the Federal estate tax?

A) A foreign tax credit is available.
B) A credit for tax on prior transfers may be available.
C) A charitable deduction is available.
D) All of these.

E) A) and D)
F) B) and D)

Correct Answer

verified

D

Question 3

True/False

Review LaterAdd Note

A tenancy by the entirety is restricted in most states to having more than two joint owners.

Accrued interest on state and local bonds is not subject to the Federal estate tax.

In his will, Hernando provides for $50,000 to go to the Madrid, Spain, school system. Because it is a foreign charity, the bequest will not qualify as a charitable deduction for estate tax purposes.

Classify each of the following statements. -Maggie purchased an insurance policy on Jim's life and designated Susan as the beneficiary.

The Federal gift-splitting election:

To make the election to split gifts, spouses must file a Form 709 Federal gift tax return).

Which of the following is not a characteristic of both the Federal gift tax and the Federal estate tax?

To avoid the terminable interest limitation on the marital deduction, a QTIP election is made.

Andrea dies on April 30. Which, if any, of the following items is included in her gross estate?

The essential purpose of the marital deduction is to defer any estate tax liability until the second spouse dies.

Stacey inherits unimproved land fair market value of $6 million) from her father on June 1, 2019. She disclaims her interest in the property as follows: one-third on December 1, 2019; one-third on January 3, 2020; and the remaining one-third on May 31, 2020. In all cases, the disclaimers pass the interest to her son the next heir under state law) . The Federal gift tax applies to Stacey for:

Match each statement with the correct choice. Some choices may be used more than once or not at all. -Community property

Mandy and Hal mother and son) purchased land for $600,000 as joint tenants with right of survivorship. Of the $600,000 purchase price, Mandy provided $300,000 and Hal $300,000 of which $200,000 had been received as a gift from Mandy) . Hal dies first when the land is worth $3,000,000. As to the land, Hal's gross estate must include:

Harry and Brenda are husband and wife. Using his funds, Harry purchases real estate that he lists as: "Harry and Brenda, tenants by the entirety with right of survivorship." If Brenda dies first, none of the real estate is included in her gross estate.

Classify each of the following statements. -Maggie purchased an insurance policy on Jim's life and designated Susan as the beneficiary. Four years later, Jim dies, and Susan collects the insurance proceeds.

At the time of his death, Leroy owed Federal income taxes on income earned in a prior year. Leroy's estate can claim an estate tax deduction for the income tax it pays.

Under the alternate valuation date election, each asset in the gross estate is valued at the lesser of the date of death value or six months thereafter.

Iris dies intestate i.e., without a will). All of her property passes to her heirs in accordance with the order of distribution prescribed under the Internal Revenue Code.